The code kicks in where such a takeover or merger is between one or more listed companies or where at least one of the parties involved in such a takeover or merger is a listed public company.
The code does not include indirect takeovers, where unlisted companies may have or acquire a controlling interest in a listed company.
The issue is of concern, because in an indirect takeover, there is no obligation to make a mandatory offer to the minority shareholders of the target company.
Widening the code, drawn up to look after minority shareholder interests, is still on the watchdog’s table though, along with other smaller changes like clarity of language, Fernando said.
The code, implemented by the Securities and Exchange Commission (SEC) is limited to listed companies only, which limits the regulator’s reach.